Updated

Washington D.C. -- The company responsible for producing 44,000 defective helmets for the U.S. Army has suspended its helmet manufacturing and waived its first right of refusal for all future military contracts, according to the office of Congressman Chris Carney from Pennsylvania.

Federal Prison Industries (FPI) was subcontracted by ArmorSource to build the helmets and it employs prisoners to assemble them. FPI, one of the nation's largest military helmet manufactures, made its decision to suspend production just as Congressman Carney introduced amendment to the Defense Authorization Act that would have forced FPI to use competitive bidding procedures. The amendment, it appears, is no longer needed.

"Our military men and women deserve only the best equipment and it has become clear that Federal Prison Industries cannot meet the standards required in manufacturing helmet," Congressman Carney said in a statement to Fox News.

The Department of the Army announced earlier this month that the helmets failed to meet standard ballistic tests and that certain parts of the helmets could not protect against multiple rounds of ammunition.

The Army issued a recall for the 44,000 helmets on May 14, admitting that soldiers in combat could be wearing the helmets without knowing it.

"We don't know where they are," said Brigadier General Pete Fuller, who oversees equipment contracts for the Army. "So they could be on some soldiers' head in either Iraq or Afghanistan. They could also be anywhere else in the world." The Army has already received some returns from soldiers in Afghanistan.

Carney's office says Federal Prison Industries is already behind on two separate helmet contracts it has with the U.S. military. One contract it has with Army calls for 600,000 helmets and another with the Marines calls for 100,000 lighter weight helmets. Carney says both products have failed to pass first article testing, and not a single helmet has been delivered either contract, both at least 18 months overdue.